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Post Office Limited
Initial Complaint Review and Mediation Scheme
Overview of Horizon and branch trading practices
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Introduction
This overview has been prepared with a view to informing the reader of
the basic functions of the Horizon system and Post Office's branch
trading practices.
It is not exhaustive - there are a number of product and scenario
specific processes that are not described in this overview.
Contents
[insert contents page]
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Post office: an overview
Post Office is a commercial business with a public purpose. The
majority of its income is self-generated but it does receive
financial support from its ultimate shareholder, the UK government.
It has around 11,500 branches and employs almost 8,000 people.
Although traditionally, Post Office is thought of a place to post
mail, its branch network now provides a full range of products and
services, from financial services such as commercial / personal
banking and access to government benefits through to lottery
scratchcards. A non-exhaustive list of products sold by Post
Office is at
2. Historically, Post Office was part of the Royal Mail Group with
operations and services centrally controlled for both businesses.
In April 2012, the two businesses separated and Post Office has
since traded as a separate company.
Subpostmasters
The majority of Post Office branches are run by subpostmasters and
are known as "agency" branches. Subpostmasters are, in the main,
individuals who are contracted to)run Post Office branches. They
are individual contractors and not employees of Post Office and
their position is similar to that of a franchisor.
4. A subpostmaster does not need to render personal service - they may
employ "assistants" to conduct branch business. In some cases, a
subpostmaster may employ a manager to run his/her branch and will
actually have minimal involvement in day-to-day operations. The
employment of assistants is the subpostmaster's responsibility.
Where below an activity is said to be undertaken by a
subpostmaster, this activity could also be undertaken by an
assistant in most cases.
5. Each subpostmaster owns (or leases from a third party landlord) the
premises from which the branch is run. Other than setting minimum
standards from the premises (in terms of legal ownership rights,
physical security, etc.) it is the subpostmaster's responsibility
to provide the branch premises.
6. Typically, the premises will be part of an existing business like a
local shop or café. This existing business is typically referred
to as the "retail business". Part of the premises is given up to
transacting Post Office business and the Post Office equipment,
cash and stock is generally kept separate on the Post office side,
away from the retail business.
7, In terms of transacting Post Office business, the subpostmaster is
an agent of Post Office. In legal terms, Post Office business is a
transaction between the customer and Post Office Limited, with the
subpostmaster acting as Post Office's agent to complete the
transaction. As the subpostmaster is not undertaking business in
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his own name, all the cash and stock held at a branch are owned by
Post Office. In effect, the subpostmaster is a steward of this
cash and stock, and although it is under the subpostmaster's
control, it is not owned by the subpostmaster.
Other branch types
The National Federation of Subpostmasters ("the NFSPI
10.
Crown - There are around 300 "Crown" branches that are directly
owned and run by Post Office. The staff at Crown branches are
employees of Post Office Limited and the branch is run by an
employed “branch manager” rather than a subpostmaster. The
operating procedures at Crown branches are largely the same as
those at agency branches.
Multiples - Sometimes branches are located in much larger
businesses such as Cooperative convenience stores or WH Smiths.
These larger businesses tend to have multiple branches and are
therefore called "multiples". The operating procedures at multiples
are largely the same as those at agency branches.
The NFSP is the organisation recognised by Post Office to negotiate
on behalf of subpostmasters nationwide. A team of negotiators
works throughout the year to improve the pay and conditions of
service for subpostmasters. The NFSP negotiates with Post Office
on the payment for all services and products transacted over a Post
Office counter. It also works closely with Post Office on a range
of otherjissues including post office security, operational systems
and technology.
. The NFSP provides a range of services offering support, advice and
information to its members, Its monthly magazine, "The
Subpostmaster", provides up-to-date information on issues affecting
subpostmasters. A 24-hour helpline gives advice on contract /
employment issues.
Representation and guidance is available in the event of
disciplinary action or disputes with Post Office. Subpostmasters
have access to local support through local branches of the NFSP and
its Executive Officers. The NFSP also runs a Benevolent Fund
providing financial support to subpostmasters in need.
Subpostmaster's contract
13.
The original subpostmaster's contract was drawn up in 1994. It has
been subject to several revisions over the years, but the core
principles have generally remained unchanged. The terms of the
subpostmaster's contract are jointly drawn up by Post Office and
the NFSP and the NFSP approves all revisions to the contract.
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14. Under the standard subpostmaster's contract, subpostmasters are
remunerated based on the volume of business that they transact.
15. A subpostmaster also has responsibility for the safekeeping of Post
Office's cash and stock. A subpostmaster is therefore liable for
any loss of cash or stock in their branches if that loss is caused
by their carelessness, negligence or error (clause 12(12)) or by
the carelessness, negligence or error of their assistants (clause
15). If cash or stock is lost by the fault of the subpostmaster,
the subpostmaster is obliged to reimburse Post Office for that
loss. The way that losses can occur is set»out in section
16. The allocation of risk for the loss of cash or stock between Post
Office and subpostmasters is not unusual. It mirrors standard
retail franchising contracts, where the “franchisee”, who runs
his/her business under the “franchisors” brand, bears the risk. In
essence, Post Office, like retail franchisors, give subpostmasters
the ability to use and operate under its most valuable asset - its
“Post Office” brand. The risk Post Office bears is that through
the actions of the subpostmaster and his/her assistants its brand so
and its goodwill may be damaged if, for example, the customer does
not experience good customer service.
17, Serious errors by subpostmasters can result in a subpostmaster's
contract being terminated and/or the subpostmaster being sued
through the civil courts to recover any related loss.
18. Where Post Office discovers evidence of criminal wrongdoing, a
subpostmaster may be criminally prosecuted. Typical criminal
prosecutions are for either theft or false accounting (where a
subpostmaster has declared transactions or stock or cash levels
within the branch which are not true). Post Office sometimes
refers these prosecutions to the police/national prosecution
service (being the Crown Prosecution Service in England and Wales
and the Procurator Fiscals office in Scotland). However, in the
vast majority of cases, Post Office undertakes a private
prosecution of the subpostmaster.
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Horizon and branching accounting
Horizon - Sophie Bialaszewski with stance from Ruth Barker (We
have previously used most of this information in press releases and
other communications. For audit — Sue Richardson
Horizon
19. Horizon is the electronic point of sale IT system used in all Post
Office branches. In 1995, following a competitive tender process,
Post Office commissioned the Horizon system (“Horizon”) from the
company now known as Fujitsu Limited. Horizon is accredited by
Payment Card Industry Data Security Standard and ISO 2700 and
encompasses the following:
19.1 both bespoke and of-the-shelf software packages which have
been designed to allow Horizon to fulfil the needs of Post
Office and subpostmasters;
19.2 the computer hardware and communication equipment which is
installed in each Post Office branch including the touch
screen counter terminal and printers;
19.3 the central data centres where transaction data is sent from
each branch and stored;
19.4 the control and monitoring systems; and
19.5 the testing and training systems.
20. Horizon is therefore more than just software. It is the IT
infrastructure used by Post Office and in all Post Office branches
to undertake all transactions (from selling lottery scratch cards
to cash withdrawals and currency exchange). Horizon stores all
transactional data undertaken at each counter in every branch.
Each terminal communicates with Post Office Data Centres via a
secure communication line with a back-up communication system and
in order to communicate Horizon must be ‘online’ on the internet.
This data is stored by Post Office for a period of seven years in
line with Post Office data retention policy.
21. In 2010, Post Office rolled out “Horizon Online” as part of its
Horizon Next Generation Programme to provide a simplified network
based on the centralised processing of data. This programme
offered the use of modern technologies, easier integration and
speedier future development as well as the potential to deliver
significant savings. Horizon Online did not seek to add new
functions to the existing Horizon system and changes to the Horizon
interface used by subpostmasters and their staff were kept to a
minimum to reduce the disruption to branches and the requirement
for training (although training was still provided to approximately
£50,000 Horizon users). The main changes were “behind the scenes”
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and affected the service provided by Post Office Data Centres,
field service and telecommunications.
22. The main roll out of Horizon Online began on 30 June 2010,
following a pilot involving 1,422 branches, and completed on 14
September 2010. As part of the roll out of Horizon Online new
equipment was provided to branches, including the installation of
34,000 new counter printers (installed in over 14,000 branches).
23. Today, Horizon is used by more than 68,000 people across 11,500
Post Office branches. On average 6 million transactions are
undertaken on Horizon every day, 22 million banking transactions
are undertaken every month and 2.5 billion transactions are
undertaken every year with a cash value of £100 billion.
Branch accounts
24. In essence, Horizon is an electronic accounting system. It tracks
every transaction made in a Post Office branch and logs the levels
of cash and stock held in each branch. The branch's accounts are
stored on and through Horizon, allowing the amount of cash and
stock held in the branch to be looked up at any time.
25. The system's core principle is that of double entry bookkeeping.
For example, if a product is sold for cash this would in most cases
result in a reductionin a branch's stock levels of that particular
product line and an increase in the amount of cash recorded as held
at the branch.
26. The effect of this double entry system is that an input in one part
of the branch's accounts can cause corresponding changes in other
parts of the accounts.
Example:
The levels of stock held in a branch can be manually adjusted. A
reduction in stock will however increase the amount of cash by the
same value as Horizon will assume that the stock has been sold.
So if the amount of first class stamps recorded on Horizon is
manually reduced by £10, the amount of cash recorded on Horizon is
automatically increased by £10.
If this adjustment was incorrect (say it was done by accident),
when the amount of cash actually in the branch is then compared to
the amount of cash recorded on Horizon, the branch will be £10
short and will be showing a loss of £10 in cash. In this way, the
error in accounting for stamps has migrated through the accounts to
manifest as a loss of cash.
However, the branch should also now be actually holding £10 more in
first class stamps than that the amount of first class stamps shown
on Horizon. This creates a "surplus" of stamps in the branch.
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In this scenario, there is therefore no net overall loss. The
error can be corrected by manually increasing the value of first
class stamps recorded on Horizon by £10, which will then
automatically decrease the amount of cash recorded on Horizon by
£10 (as Horizon will assume that as there are now more stamps in
the branch, those extra stamps must not have been sold). This will
bring in line (or "balance") the branch's accounts recorded on
Horizon with the actual cash and stock holdings in the branch.
Processing transactions on Horizon
27.
28.
29.
In simple terms, most customer transactions are processed as
follows:
27.1 A customer approaches the branch counter and requests certain
transactions.
27.2 The subpostmaster selects the appropriate product or service
on the Horizon terminal and, if necessary, inputs the value of
the transaction (eg. cash withdrawal from a bank account of
£100).
27.3 This process is repeated for each transaction requested by the
customer (eg. at the same time as the cash withdrawal, the
customer purchases £10 of stamps).
27.4 Horizon groups the transactions together in a "basket" of
transactions and displays the net amount to be paid to the
customer or needs to be taken from the customer (eg. in the
above situation, the net cash due to the customer is £90).
27.5 If payment is to be taken from the customer, the subpostmaster
selects the payment method (eg. cash, cheque, debit card,
ete.).
27.6 The subpostmaster takes the payment from the customer or pays
out cash to the customer as required.
27.7 The subpostmaster completes the transaction on Horizon which
closes that basket, ready for the next customer, and updates
the branch's cash and stock records on Horizon (eg, in this
scenario, the branch's cash will have decreased by £90 and
stamps by £10).
There are exceptions to the above due to the specific accounting
requirements of certain products (eg. Lottery transactions must be
transacted on the separate national lottery terminal and Horizon is
then be updated later in the day).
There may also be various other steps that the subpostmaster needs
to take to complete the transaction which are specific to the
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product in question (eg. completing and sending off various
receipts and paperwork).
Reconciliation with clients
30. A number of the products and services available at Post Office
branches _are provided by third parties - see the product list at
section BBRBNGB. These third parties are commonly referred to as
"client:
31. When a client product is transacted, details of this transaction
are communicated to client. Sometimes, this reconciliation is
conducted in real time, and sometimes it is conducted at a later
point. Post Office is then liable to account to the client for the
transaction value (or vice versa). This interconnectivity with,
and the transfer of information and records to and from, clients is
part of Horizon's functionality.
Exampl
At Post Office branches, a customer can)deposit cash in or
withdraw cash from his/her bank»account with a number a major
banks (eg. Lloyds, Santander, etc.).
If a customer wishes to withdraw £100 of cash from an account,
the Horizon system connects to the client's computer banking
system to confirm that the cash is available for withdrawal.
Once authorised, Horizon will tell the subpostmaster to proceed
with the transaction and to give £100 in cash to the customer
(assuming that there are no other transactions in the basket).
The amount of cash recorded in the branch's accounts on Horizon
will be automatically reduced by £100 to reflect the withdrawal.
This way the branch's accounts are kept in balance with the
amount of cash actually on hand.
Likewise, the customer's account with the client bank will be
debited £100.
At this point, Post Office is out of pocket: it has paid out
£100 in cash to the customer but not received £100 from anyone.
There is however a later reconciliation between the Horizon
transaction records and the client bank's transactions records.
Assuming that there is no error or discrepancy, the bank will
then pay the value of the withdrawal (ie. £100) to Post Office.
This process would happen in reverse for a £100 deposit into a
bank account, with the result that the cash position on Horizon
at the transacting branch is increased by £100, the branch
holding £100 more cash on hand and Post Office making a later
payment to the client bank of £100.
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Remittances
32.
34.
Branches send or receive cash and stock (which includes customer
cheques as cheques are classed as a stock item on the Horizon
accounts) to and from Post Office central processing centres. This
movement of cash and stock is called a "remittance" (and is often
referred to as "remming in" or "remming out").
. Branches are either classed as “cash surplus” or “cash deficit” in
terms of cash management. Those branches that are classed as cash
surplus receive more customers who make deposits (eg. by making
cash deposits to bank accounts or by buying products with cash)
than customers who require cash withdrawals. For example, cash
surplus branches tend to be in areas where there are lots of
business customers making large deposits but not many benefit
customers making withdrawals. These branches do not require cash
remittances to be sent to the branch from Post Office as they will
have a net inflow of cash from customers. These branches are
however required to return cash to Post Office [ 2] in
order to prevent the branch holding too much cash on site.
Cash deficit branches are those where the money deposited by
customers to the branch does not cover the amount that the branch
has to pay out. These branches rely on Post office to send cash to
the branch in order to ensure that there is sufficient cash in the
branch to meet its needs.
35.
36.
37.
Where Cash is to be remmed out to Post Office, the branch is
responsible for placing sufficient cash into the remittance pouch,
entering the amount that is being remmed out onto Horizon and then
either handing the remittance pouch to the Cash in Transit Driver,
or sending it back to Post Office via Royal Mail Special Delivery.
This will decrease the amount of cash recorded in the branch
accounts on Horizon.
Where cash is remmed into a branch, the cash remittance is sent by
Post Office to the branch either via a Cash in Transit Driver or
via Royal Mail Special Delivery. The branch is responsible for
checking that the remittance pouch contains the amount of cash
stated on the remittance and then logging the receipt of cash on to
Horizon. This will increase the amount of cash recorded in the
branch accounts on Horizon.
A similar process is used to rem out customer cheques received by
the branch. When a customer pays by cheque, the total aggregate
value of all cheques held by a branch is increased on Horizon.
Cheques are then remitted by a subpostmaster to Post Office on a
regular basis which reduces the value of cheques recorded on
Horizon, Post Office then takes responsibility for putting the
cheques into the banking system and recovering payment from the
customer's bank.
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Branch Settlement — Rod Ismay
Reporting
38. Subpostmasters are required to run and review in-branch reports to
ensure that the branch is functioning effectively and to allow Post
Office to monitor cash and stock levels against its records. This
includes:
38.1 Daily Cash Declaration - staff at each branch are required [to
count and declare the cash stored in that terminal at the end
of each day. The actual cash on hand is input onto Horizon
by the subpostmaster or his assistants. Horizon then shows
any "discrepancy" between the cash on hand and the amount of
cash that should be in the branch according to the branch's
accounts.
If a discrepancy is identified then the cash should be
recounted and the paperwork re-checked. If there has been an
error in the counting of the cash, then the cash should be re-
declared. Transaction and event logs plus a balance snapshot
can be printed from Horizon to check for any errors or
amendments which may be needed. It is also best practice to
open and check any stock and cash pouches made up ready to
return to Post Office.
38.2 Weekly Balance - It is recommended that every week, a branch
undertakes a full cash and stock count. The actual amounts on
hand of cash and stock can then be compared to the figures
recorded in Horizon. This helps the branch with identifying
discrepancies and, where possible, corrected.
Weekly deficiencies can also be temporarily moved into a
"suspense" account by a subpostmaster. This is a separate
line in the branch accounts which records any losses or
surpluses so that the daily trading accounts can be put into
balance. Amounts are typically held in suspense to allow the
subpostmaster time to try to resolve the discrepancy.
The Daily Cash Declaration and the Weekly Balance are tools
for the subpostmaster to use to manage their branch.
Declaring a loss or surplus through either of these reports
does not trigger any action by Post Office.
38.3 Monthly Trading Period Rollover ~ This is similar to the
Weekly Balance but is mandatory every month. It also requires
any discrepancies (including those put into suspense during
the month) to be resolved. This process is also called
"rolling over" or the "end of trading period" process. At the
end of the process, the subpostmaster must print off and sign
a "Branch Trading Statement". This statement confirms that
the cash stock shown in the accounts reflects the cash and
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stock held in the branch (with any discrepancy having been
declared and resolved - see below).
38.4 Cut off routines - for example, validating the physical
cheques held in branch to send to clearing or banking
summaries to send to Santander. Validations of physical
paperwork against Horizon records can detect errors or
omissions.
38.5 Other reports - trial balance snapshot, transaction logs,
suspense reports, daily sales and reversals. I (Commented [A3]: More detail needed. )
Resolving surpluses or losses of cash or stock
39. If following the monthly rollover there is a shortage or surplus of
stock, the subpostmaster will (i 0S SRSNSEMRNGS) 2
40. If following the monthly rollover there is a surplus of cash (when
the cash on hand i.e. in branch is more than the amount of cash
recorded in Horizon), the subpostmaster is entitled to physically
remove from the branch sufficient cash to bring the branch back
into balance. This excess cash then becomes the subpostmaster's
property and they may do with it as they wish.
41. If following the monthly rollover there is a shortage of cash (when
the cash on hand is less than the amount of cash recorded in
Horizon), Horizon presents the subpostmaster with three option
41,1 Make good - the subpostmaster can elect to put additional cash
into the branch from their own personal funds to make up the
shortage.
41.2 Settle centrally and pay - the shortage is transferred to the
subpostmaster's personal account with Post Office. The cash
figure on Horizon is reduced to bring it in line with the
actual cash on hand at the branch. However, the subpostmaster
personally owes the cash loss to Post Office as a debt. This
debt can be repaid by either (a) a direct payment from the
subpostmaster to Post Office or (b) by deductions from the
subpostmaster's remuneration.
41.3 Settle centrally and dispute the shortage - if the
subpostmaster believes that the shortage was not his/her fault
or could be resolved through other means (see below), then the
debt will be suspended to allow time for the shortage to
investigated and remedied. The subpostmaster disputes a
shortage by contacting the Finance Service Centre ("FSC") at
Post Office.
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Transaction corrections
42. The FSC (often referred to as “Chesterfield” by subpostmasters) is
the behind the scenes account processing centre providing daily
services to clients, branches, multiple partners and customers.
43, Transaction Corrections (“ICs”) are transaction adjustments sent by
the FSC to branches when errors are found. Even if the branch's
accounts are balancing (ie. there is no diserepancy between cash
and stock on hand and the cash and stock levels on Horizon), it may
be that the branch has processed transactions erroneously or in a
way that causes a Post Office client.to refuse to reconcile the
transaction with Post Office, thereby causing a loss to Post
Office.
44. 1TCs can be issued for a wide range of issues resulting from matters
such as errors or omissions in data entry, such as mis-keying,
forgetting to enter data, failing to close a customer basket from
previous customer session, delays in sending cheques for
processing, incomplete cheques, bounced cheques and card payment
issues In 2012/13 the most common reason for TCs being issued ‘Commented [A4]: Can we provide few worked examples in
to branches was due to "cash remittances". etal of how errors occur and how the TC corrects the error.
45. Due to the fact TCs are often generated due to a discrepancy
between Horizon and a client's records, there can be a time lag
between the error occurring and the TC being issued.
Example:
Ifa customer deposits £100 into their bank account but, through a
keying in error, the branch only records a deposit of £10 on
Horizon, Post Office is reliant on the customer pointing out the
error.
In this scenario, the records on Horizon and at the client bank
will reconcile as both will show a £10 deposit. The branch will
have a £90 cash surplus (as the branch will have taken £100 from
the customer but only recorded receipt of £10 in Horizon).
The only person who is able to identify the error is the customer
when they check their transaction receipt or bank account
statement. The customer may raise a complaint with Post Office
directly or could raise the complaint with his/her bank who will
then contact Post Office.
46. The time taken to identify the error is therefore sometimes outside
of Post Office's control. However, Post Office achieved its target
for 2012/13 and issued 95% of TCs within 3 months. (Commented [A5]: Within 3 months of what? )
47. When a TC is sent to a branch through Horizon, the branch is
provided with evidence of how the error has occurred. [Cs are (Commented [A6]: Via Horizon or in hardcopy? )
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48.
49.
50.
51.
often superseded by enquiries with branch, particularly if a large
number of TCs are being sent to that branch.
Following receipt of a TC, a branch is required to process the TC
jvia Horizon to make the necessary adjustments to correct the error.
Processing a TC often results in an adjustment Ito the cash or stock
position at the branch within the branch's accounts. TCs can both
debit or credit the branch's accounts. As such, a TC may not
immediately cause the subpostmaster a loss or cause any loss to the
subpostmaster at all.
TCs can also be disputed with the FSC team that issued the TC. If
the TC dispute is upheld a compensating TC will be issued to the
branch. If it is not upheld a written appeal can be made to the
relationship manager in FSC who will review the case and make a
final decision. Any payment required by the subpostmaster will be
suspended»until the review is completed.
On average around 12,000 TCs are issued to branches each month.
The volume of TCs)issued)for branches during the 2012/13 period was
84,217, with an average value of around £100 each. This is against
a backdrop of an average 2.5)billion transactions being completed
on Horizon each year. [For this period 14.9% of branches were not
issued with a TC
] Post Office takes steps to
minimise the number of TCs which occur by offering training (as
described [below]) and monitoring the performance of branches.
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(Commented [AB]: Wht does this invohe? }
[AB]: Cana have any other eect? )
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Crown Branches
52.
Post Office operates around 300 Crown branches that are directly
owned and run by Post Office. The staff at the Crown branches are
employed by Post Office and a “branch manager” rather than a
subpostmaster manages the branch.
. The operating procedures at Crown branches is largely the same as
the agency branches run by subpostmasters except as follows:
. Equally Crown branches are subject to audits (see [§RRI]) and if a
branch manager of a Crown branch is suspected of wrong doing Post
Office will take action, including criminal prosecution.
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Training
Sue Richardson (Training content owner), Gayle Peacock and Anne
Allaker (Busine.
‘Improvement Programme)
55. New subpostmasters receive training prior to and after taking up
5
their position in branch. Training covers matters such as how to
transact products and services; how to reconcile the days
transactions; how to remit in out cash and stock; and how to
despatch cheques to processing centres. Subpostmasters are also
trained on how to balance the branch on a weekly basis and roll
over in to the next balancing period. As part of this training,
subpostmasters are shown how to verify transactions and the cash
and stock on hand if discrepancies.arise, as well as how to accept
discrepancies, make good any losses and gains, and how to raise
issues about errors/discrepancies.
. Post Office continually monitors and considers how best to train
subpostmasters and, as part of the current Business Improvement
Programme which aims to improve the performance of all branches, it
is reconsidering how best to train subpostmasters on new products
(currently training on new products is through workbooks and
Horizon testing). Examples of the types of training Post Office
has offered in the past are as follows:
56.1 2001 — New subpostmasters received 2 days of classroom
training followed by 10 days of onsite training and support
This would be followed with one day of follow up balance ((i
56.2 2002 - New subpostmasters received classroom training (Post
Office no longer retain details of the length of classroom
training due to the time which has past and Post Office’s data
retention policy). 11 days of onsite training and support was
offered depending on whether the classroom training was
attended. This would be followed with one day of follow up
balances
56.3 2003 - between 5 and 10 days of classroom training was offered
to new subpostmasters (the training being optional) and 6 to
10 days of onsite training and support was given depending on
whether the classroom training was attended. This would be
followed with one day of follow up balance.
56.4 2004 - 2005 - between 5 and 10 days of classroom training was
offered to new subpostmasters (the training being optional)
and 5 to 10 days of onsite training and support was given
depending on whether the classroom training was attended. This
would be followed with one day of follow up balance.
56.5 2006 - between 5 and 10 days of classroom training was offered
to new Subpostmasters (the training being optional) and 6 days
of onsite training and support was given depending on whether
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the classroom training was attended. This would be followed
with one day of follow up balance.
56.6 2007 - 2011 - New subpostmasters received 5,8 or 10 days of
training on foundation, sales and other specialised modules. 6
days of onsite training and support was provided, followed
with one day of follow up balance. In 2007 following a pilot
scheme follow-up telephone calls were introduced at intervals
of 1 month and 6 months after the branch was taken over by the
subpostmaster, with a one day site visit taking place 3 months
after the branch was taken over.
57. In 2012 Post Office tailored its training depending on the specific
role being undertaken and rolled out further training to, for
example, experienced subpostmasters who took on MAIN contracts
?] as well as
subpostmasters who took over additional branches but had new staff
to train. The precise training given to subpostmasters will depend
on a number of factors such as whether the subpostmaster is
completely new to the role, whether he/she is taking over an
existing branch with existing staff, the size of the branch and the
types of products sold. For example, Post Office currently
offers (amongst other packages) the following packages of training
to new subpostmasters:
New Post Office Local Operator
57.2 Prior to the transfer/conversion of a branch to a new
subpostmaster 3 hours of distance learning is offered to the
subpostmaster and their staff. This includes a written
Foundation Module -
57.3 The subpostmaster is then offered 3 days of cTo {I
2] classroom training. Following the classroom
training it is the responsibility of the subpostmaster to
feedback to their staff. However, if the subpostmaster is
employing 6 or more members of staff, Post Office will offer
spaces on the course to up 50% of the subpostmasters staff.
57.
Post Office schedule the equivalent of 1 days’ training
(normally split over 2 days depending on availability) for
office set-up,
a1.
Following the office set-up a one day induction is offered to
the subpostmaster and all members of staff.
57.5 In addition a comprehensive training guide is sent to the
branch for the subpostmaster and all staff to use, the
following onsite training and support is offered to
subpostmasters:
(a) 6 days if the subpostmaster has 1-2 members of staff;
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57.6
57.7
(b) 7 days if the subpostmaster has 3-4 members of staff;
and
(c) 8 days if the subpostmaster has more than 5 members of
staff.
Following completion of the onsite training a follow up
balance is arranged 7 days later [to address any issues that
have arisen in completing transactions and using Horizon -
After a further 1-2 weeks the Field Team
will telephone the subpostmaster to
seek feedback on the training and establish if further support
is required.
Post Office will arrange a site visit to the branch to address
matters such as product knowledge, transactions and any
training needs at intervals of 1 month and 3 months after the
branch is transferred/converted. Post Office will also
arrange an audit 6-9 months after the transfer/conversion to
verify stock and ensure its regulatory and business processes are being properly
followed.
New Main Operator
57.9 Prior to the transfer/conversion of the branch the
subpostmaster and their staff are provided with a Distance
Learning booklet to work through which includes 6 compliance
workbooks to complete covering anti-money laundering,
financial services, data protection, mails integrity,
dangerous goods and homephone and broadband.
57.10A 7 day CTO class training session is offered to the
subpostmaster and up to 50% of his/her staff. It is the
responsibility of the subpostmaster to feedback the training
to the remainder of their staff. An additional day is
offered to cover non-core products for branches which will
offer such products. Following completion of this session
an engagement evening with the Sales Capability Manager II
] is arranged
for the subpostmaster and all their staff to attend. The
Sales Capability team then arrange a 2 day workshop for the
subpostmaster and one member of staff to cover sales training.
It is the responsibility of the subpostmaster to feedback the
training to the remainder of their staff.
57.11When the branch is ready to “go-live” an office set-up day is
arranged (split over 2 days) with the branch opening at 1.
00pm on “go-live” day. A Field Support Advisor (“FSA”) (see
) will attend the “go-live” day to
provide assistance (an additional FSA will attend if there is
more than 6 staff). Additional onsite training and support
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is provided for 6 days following the “go-live” day and the
branch will receive a training guide. A follow up balance is
arranged 7 days after the onsite training is completed {
. After a further 1-2
weeks the Field Team Leader will telephone the subpostmaster
to seek feedback on the training and establish if further
support is required.
57.12 Post Office will arrange site visits to the branch to address
matters such as product knowledge, transactions and any
training at intervals of 1 month and 3 months after the branch
is transferred/converted. Post Office will also arrange an
audit 6-9 months after the transfer/conversion.
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Support for subpostmasters
Kendra Dickerson, NBSC_ Relationship Manager
NBSC
Please provide information on the Horizon helpline as well?
58. The Network Business Support Centre ("NBSC") was established on 15
December 1999 to help and support subpostmasters and their staff
with customer transactions and navigation of Horizon. NSBC can
support subpostmasters with a wide range of issues such as
providing assistance with transactions carried out through Horizon,
navigation, how to address and deal with mistakes and any issues
arising out of weekly branch trading.
59. NSBC is open 6.00am to 11.00pm Monday to Friday and 7.00am to
5.00pm on Sundays and Bank Holidays. [Therefore, NSBC is
available to support subpostmasters and their employees during and
after the opening hours of their branches —
60. Post Office currently employs 70 people to sit within NBSC and
receive calls, undertake second line support (where a query cannot
be addressed during the telephone call, second line support will
liaise with Post Office product teams to source the answer) and
carry out administration roles. NBSC staff are highly trained and
have extensive knowledge of Horizon and how branches operate. On
average NBSC receives 1,700 calls a day, 11,000 calls a week or
600,000 calls a year (based on data obtained for 2012/13). NBSC
operates a two tier escalation process; If the NBSC advisor is
unable to resolve the query/issue with the caller, the call is
escalated to tier 2 where more expert advice will be provided.
If this still does not resolve the issue the Branch Support Team
Will decide if further training or face to face branch support is
required.
Field Support - Gayle Peacock
2. Post Office has a large network of branches and subpostmasters
which is currently managed in the following way:
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62.1 The Top 2000 branches , which are usually the largest branches
with the highest sales potential, are managed by an Area Sales
Manager (“ASM”). These branches receive face to face visits
from the ASM on a regular basis (at least monthly), primarily
to assist with improving business and sales performance, but
other non-sales issues are also addressed if required.
Whilst the ASM is trained to be a sales coach, they are not
considered by Post Office as “trainers” and would go to other
“expert domains” such as the Field Support Team to obtain
assistance for subpostmasters with, for example, balancing
issues and using Horizon. The subpostmasters of these
branches are also invited to attend Quarterly Business Up-
dates where a range of topics are discussed. Usually about
40-50 branches attend each session and there are at least 2
events held in each of the 7 regions [what are the regions?
Please list] cach year. If a branch has also converted to a
MAINS contract [what is a MAINs contract and how is it
different?] , then the subpostmaster will also be invited to
take part in the “Breakthrough” programme. This involves
intensive on-site support post conversion by 3 ASMs. The
purpose of this training is to assist with the mind-sets and
behaviours of the subpostmaster and their team to ensure that
the income of the branch)is retained and maximised.
62.2 The Next 2000 branches, which are selected either because they
have the sales potential or because the geographical location
is such that it is not cost effective to be managed by an ASM
as part of the Top 2000 branches (for example branches located
in remote parts of Scotland, Devon and Cornwall), are actively
account managed from a sales perspective by the Telephone
Account Management team. Face to face visits do not
routinely occur (unless there are, for example, training
issues to address), but the Telephone Account Management team
make [ ] calls to the branch to monitor sales progress.
The team can also refer branches to be visited by a Regional
Sales Trainer who can visit to coach the subpostmaster and
their staff on sales.
62.3 Remaining branches These branches are classed as “Branch
Support” branches. They are not visited pro-actively and do
not have a manager assigned to them. Their first point of
contact is NBSC where they can seek assistance with issues
such as balancing queries and resolving mistakes. Details of
NBSC are set out [above]. If NBSC cannot resolve the query,
there are a number of escalation points depending on the
nature of the issue and, ultimately, if it cannot be resolved
over the telephone a visit by a FSA can be arranged.
63. Post Office has a dedicated Field Support Team which is responsible
for induction and on-going transactional training for all
subpostmasters. Currently the team consists of 227 Field Support
Advisors (“FSA”) and 18 Field Team Leaders (“PTLs”). This number ‘Commented [Ai2]: Please describe theirbackground and }
has doubled from 2010 when the team expanded to cope with the experience.
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Network Transformation Programme (the “NT Programme”) (Wwhat)is)/his
programme? I The team is responsible for matters such as:
63.1 Delivering classroom training (a 5-8 day course) to all new
subpostmasters, who are going through the NT Programme.
This training takes place before a new subpostmaster starts
work in the branch and further detail is set out [below].
63.2 Training on site following a branch transfer. FSAs will
attend the branch for a number of days after the transfer and
will cover a range of topics to ensure the branch can operate
effectively. This will be followed up with site visits,
telephone calls and an audit.
63.3 Requests from branches for remedial training from FSAs
throughout the year. This training is delivered as and when
required on a wide range of topics such as new ATMs, DVLA
transactions, balancing issues and unexplained losses. The
team received 863 requests for extra support in 2013.
Generally the subpostmaster will receive the training and the
subpostmaster is then responsible for training their own
staff. However, each request for training is considered on a
case by case basis and Post Office endeavours to provide the
best support necessary to address the issues raised by the
subpostmaster.
63.4 Undertaking Compliance and Financial audits which also
includes providing further training to subpostmasters on
matters that arise out of any issues identified by the audit.
In 2013 there were over 3,000 compliance audits undertaken and
cash»and stock checks were completed in 2,873 Post Office
branches.
64, The Field Support Team is not the only team within Post Office who
provide training and support, either on a face to face basis or
remotely via the telephone, for example:
64.1 Mails Development Managers were established in 2010 to visit
branches which receive high volumes of mail. They train
these branches on products and sales to increase business
growth in this area.
64.2 The Branch Standards Team was established in 2009 and is a
telephone-based intervention team. The teams contacts
branches regarding a wide range of performance issues.
Whilst the purpose of the call is to notify the branch of any
errors, they also ensure that the branch knows the correct
procedures to follow. If the branch requires further support
at any time, the team request a visit by an FSA via the Branch
Support Team [ean you provide a summary of what the Branch
Support Team does as opposed to the Field Support Team?].
There are also a number of teams across Post Office who come into
contact with subpostmasters (such as product specific teams like
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the national lottery team) and may feel that a visit or further
training would be beneficial for support. These teams can request
further visits and training for subpostmasters through the Branch
Support Team who will decide the most appropriate resource to
resolve the issue.
65. Post Office has gone through a number of structure reviews which
have impacted on the support and management of subpostmasters and
their branches. These reviews have been driven by various cost
challenges and were often determined by Post Office’s funding from
the UK government for its network of subpostmasters. As a result,
Post Office’s approach to structuring its agency relationships with
subpostmasters has changed over the years, for example:
65.1 Up to 2005 - branches were either designated Urban or Rural.
Each Urban branch and the largest of the Rural branches was
assigned a Retail Line Manager (each Retail Line Manager would
manage around 40-60 branches). The smallest of the Rural
branches would be managed by a Performance Advisor (each
Performance Advisor managed approximately 100 branches).
Both Retail Line Managers and Performance Advisors were
responsible for performance. The Post Office training team
which sat within Post Office’s HR department was responsible
for matters such as transactional training.
6s.
2005-2006 = the network of subpostmasters was operated under a
structure of Diamond, Platinum and Gold. This structure was
known as a Sales and Service structure. Most branches
operated under the Diamond or Gold network. The structure
had a series of Sales Managers and also had Area Performance
Managers. Again, most branches had an allocated manager who
would visit and the training team were an extra resource to
use for matters such as transactional training.
65.3 2006 - 2008 - in 2006 there was a full review of Post Office’s
structure. Sales Managers were replaced by either Commercial
or Community Business Development Managers (“BDM”). Each
branch had a BDM assigned to it. In the Commercial network,
the BDM would manage about 40 branches and in Community
network about 100 branches. The Commercial Network
concentrated largely on sales and the Community network was
responsible for picking up non-sales issues. The Branch
Support Team was also established to assist with sales issues.
It was also at this point that the Training team were renamed
Network Field Support Advisors.
65.4 2008 - the financial audit team merged with the Network Field
Support Advisor team so Support Advisors would conduct both
training and audits in branches.
65.5 2009 - in around 2009 Post Office took the decision to remove
the BDM role and the Area Sales Manager structure was created
and, as a result, if a smaller branch required a site visit it
would need to be requested from NBSC, [Is there any reason
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why regular site visits are not necessary ? i.e. support on
the internet, increased resource at NBSC ?]
Auditing
66.
67.
68.
70.
In order to monitor and validate performance Post Office will often
conduct audits of branches. This allows Post Office to assure and
verify its assets which are held in branches and to ensure
compliance with regulatory and business requirements.
Audits can take place:
67.1 when a risk at a branch has been identified (eg. the branch is
continually suffering shortfalls);
67.2 on the transfer of the branch to a new subpostmaster (an audit
will often take place 6-9 months after the date of transfer);
or
67.3 following a robbery or burglary.
As it is not possible for Post Office to visit and audit every
branch each year, it also undertakes random sampled audits whereby
branches are selected at random to be audited. Whilst this has the
benefit of validating the stock held withim a branch and ensuring
Post Office’s systems and practices)are being adhered to, it also
assists Post Office with risk profiling. For example, it can
provide a baseline measure of risk for Post Office i.e. if 5% of
branches randomly selected show financial irregularities resulting
in suspension it could be projected that Post Office is exposed to
a risk of 5% non-compliance across.all its branches.
- Whilst the precise nature of the audit will depend on the reason
for the audit (eg. if it is as a result of a robbery, audits are
carried out to verify the loss suffered) primarily an audit
consists of an inspection of the cash and stock held by the branch.
This may be followed by a Compliance Audit to ensure regulatory and
business requirements are met. Audits are undertaken on an
entirely objective basis and will include checks such as:
69.1 for branches with paystations or lottery terminals, ensuring
any overnight Transaction Acknowledgements (an automated way
to account for transactions carried out for clients such as
Camelot, see section [[RXRJ)have been properly accepted;
69.2 checking the cash declaration for the previous trading day;
69.3 counting and recording the cheques held in the branch against
the record maintained on Horizons
69.4 verifying the currency held in branch; and
69.5 counting and recording the amount of stock held in branch
against the record maintained on Horizon.
The results of the audit are discussed with the subpostmaster and,
in the event of financial irregularities, may result in the
subpostmaster being suspended or being asked to “make good” the
loss. Alternatively, transaction corrections may be required (see
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section[MMMNMMMM) and if compliance issues are identified this may
be followed up by the Branch Conformance Team I[who will assist the ‘Commented [A13]: please describe ths team and what it
subpostmaster in rectifying the compliance issues -please confirm]. does?
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Second Sight “Thematic Issues” [ANDY PARSONS TO COMPLETE]
- Transactions or Transaction Corrections not entered by
the Sub-postmaster or staff -Spot Review 6
- Transaction anomalies associated with: - We can't
respond on these without specifics from SS. However, we
should include a basic description of each transaction process.
© CASH or STOCK Remittances;
Pensions and Allowances
telecommunication or power failures) Spot Review 1
ATMs
Scratch Cards - Spot Review 22
MVL
Foreign Currency
Bank / GIRO / Cheques -Spot Review 12
Stamps, Postage Labels, Phone Cards or Premium Bonds
- Hardware issues e. printer problems, PIN pads,
touch screens and PayStation = info needed on how kit is swaped
out and installed.
- Limitations im the Transaction Audit Trail available to
Subpostmasters - covered))for green giros only so need someone to
explain that there are audittrails fom all products.
00000000
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Possible reasons for balance discrepancies
Gayle Peacock / Angela Van Den Bogerd
71. In Post Office’s experience there are several reasons why a branch
may encounter a discrepancy between the amount of cash and stock on
hand and the amount of cash and stock recorded on Horizon - this
situation is commonly referred to as a “balancing discrepancy".
72. It should be noted that some of the situations below may cause a
gain for a subpostmaster or only cause a temporary loss. However,
this can cause real losses to be hidden:
72.1 If an error causes a surplus of cash in the branch, this may
off-set a loss caused by another error. In that scenario, the
loss error may not be revealed, as the overall branch accounts
will balance or show a surplus; or
72.2 If the surplus error is later discovered and corrected via a
TC, then in a later)version of the accounts there may be a
loss even though all transactions in that later period have
been conducted correctly.
Example:
A branch suffers two errors, one creating a £100 gain and another
causing a £100 loss. At the end of the trading period, the
branch's accounts will balance.
In thé next trading period, the suplus error is discovered. A TC
is/sent to the branch which increases the amount of cash recorded
in the branch accounts.) Throughout the rest of the trading period,
all other transactions are conducted correctly. Nevertheless, the
result of the transaction correction is that at the end of the
trading period, the branch has less cash than required by the
branch accounts and the subpostmaster therefore perceives that
he/she has suffered a loss.
Miss-key
73. A miss-key is the term used when staff enter the wrong value of the
transaction Iinto Horizon at the manual stage of the transaction Snes Isit possible to also miskey the worng }
compared to the actual amount of the transaction. The difficulty product? If so, please provide an example,
with a mis-key error is that only the employee who conducted the
transaction will be able to prevent or retrospectively identify
this error.
Example:
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A personal banking customer may wish to deposit £1000 into their
account and the person serving the customer mistakenly enters
£10000 but only £1000 cash is taken from the customer. This would
create a shortage of £9,000 for the branch.
In order to rectify this mistake, the Banking Team within the FSC
has to contact the associated client bank who in turn contacts its
customer. The customer will be asked to confirm the amount
deposited at the branch. However, the receipt printed from Horizon
and provided to the customer will show a deposit of £10,000 and,
therefore, the rectification process relies largely on the goodwill
of the customer and their bank.
Unless it can be agreed with the bank to reverse the transaction,
there will be a real loss of £9,000 to Post Office as Post Office
will need to account for the full £10,000 as the customer's account
will have been credited with £10,000.
Connectivity
74, Each Horizon terminal requires a telecommunications signal in order
to record transactions to the central Post Office data centre.
Each branch uses the signal to communicate with a data centre where
all transaction data is sent, and this in turn communicates with
Post Office’s clients (such as banks, DVLA and local authorities)
to complete transactions. The router in each branch which
communicates with data centre needs to be connected to both a power
supply and a communication channel to complete customer
transactions.
75. If there is an interruption to the power supply during a customer
transaction, for example, a power cut due to severe weather, the
Horizon user will be prompted, once the system is reconnected and
the user is logged back on, with a message containing instructions
on how)to recover the interrupted transaction. The message explains
whether the customer’s transaction was completed and whether any
payment needs to be received or made.
76. Similarly, if there is an interruption to the communication
channel, for example, a telephone line cut and/or a failure to
connect to the mobile backup device during a customer transaction,
Horizon will prompt the user with an on-screen messages explaining
what to do to and whether to cancel or retry the transaction.
71, If the Horizon user does not follow the recovery instructions
correctly, this could result in a balancing error.
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Cheque handling
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services. Cheques can be fenchased for certain jor accepted as (Commented [A15]: what does this mean? )
deposits for certain Partner bank accounts. There are set
procedures that must be followed in branch at the end of each day
to ensure that the cheques are handled correctly, the customer's
bank account is debited accordingly and Post Office can settle the
client accounts.
Example:
If a cheque is presented by a customer to pay for a
transaction, but the transaction)is accidently settled as a
cash transaction, the value of cheques held in the branch
recorded by Horizon will not match the value of the actual
cheques held in the branch. At the end of each day a cheque
listing is printed from Horizon. This printout should be
checked against the cheques held in branch and if it does not
match, Horizon should be corrected before remitting out the
cheques to Post Office. After remming out the cheques, a
further cheque listing should then be printed to confirm that
no cheques are held in branch. If a branch has not ensured
that the cheques in branch match Horizon’s record before
remming out the cheques, Ithen the caSh in the branch will show
@ shortfall Iand the amount that is received in the cheque [A16}: why?
processing centre will not match the amount that has been
entered onto Horizon. This will generate a Transaction
Correction to correct the account.
79, Following the dispatch of cheques, the ‘cheque line’ on Horizon
must be “cut-off” which will return the amount recorded as held in ‘Commented [A17]: Please explain in more detall/ with no
branch to zero. If the cheques are not “cut off” at the end of the jargon
day the cheque listing on the following end of day procedure will
not agree with the actual value of cheques held in branch. This is
corrected in exactly the same way by amending the “cheque on hand”
figure to show the correct value of the actual cheques held in
branch. The value of the cheques in branch is then sent out before
a further cheque listing to confirm a zero entry is printed.
get Declarations
80. At the end of each day a cash declaration is made by the staff in
the branch for every stock unit which has been used, even if it’s
only been used to transfer cash or stock to another stock unit
within the branch. [Can we explain what stock units are and how
they work in branch?] The cash should be counted and declared
accurately by denomination before 19.00 hrs. each day. It is this
process which informs Post Office’s Cash Management Team how much
cash the branch is holding which in turn informs the Flexible
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Planning system [What is this?] how much cash should be sent to or
returned by the branch on their next scheduled remittance.
81. On a balance day [when/what is a balance day?] each branch should
complete a daily and a weekly cash declaration. On any other day
each branch should only complete a daily cash declaration. Once the
cash has been counted and declared Horizon will check the declared
cash against the day’s transactions and inform the user whether
there’s a discrepancy between the cash declared and the expected
cash in branch compared to the transactions for that day. If a
discrepancy is identified then the cash should be recounted and
the paperwork re-checked. If there has been an error in the
counting of the cash, then the cash should be re-declared.
Transaction and event logs plus a balance snapshot can be printed
from Horizon to check for any errors or amendments which may be
needed. It is also best practice to open and check any stock and
cash pouches made up ready to return to Post Office. If the pouches
are checked they need to be reversed out of Horizon and once the
contents have been checked a fresh pouch should be used to make a
new remittance out.
82. If the error cannot be identified, then the discrepancy should be
resolved by the subpostmaster and the cash should be re-declared to
reflect any adjustments that have been made to the cash. ‘Commented [A18]: This is not a cause of an error but rather a
process description of how errorsare revealed ~ what s the error?
Staff actions
Logging onto and transacting from the wrong stock unit
83. Each staff member logs onto Horizon with their own user ID and
password and attaches themselves to a stock unit containing cash
and stock. If a user accidentally attaches themselves to the wrong
stock and serves customer or transfers cash or stock this must be
corrected as soon as possible, by either reversing the transactions
and putting them through the correct stock unit, or calculating the
cash value of the transactions and transferring the money to the
correct stock unit. In theory, there should be no material loss to
the branch as any losses in one stock unit will be compensated by
the gains in the other stock unit. A miss-balance will usually
occur if the mistake is not correctly rectified.
‘Commented [A19]: What isa stock unit? Please re-expain thi
section not using POL jargon
Miscounting cash on hand
84. Cash must be physically counted at the end of each day and when
completing a Branch Trading Statement. When completing the
physical cash count, notes and coins can sometimes be miscounted or
missed altogether. When counting cash quickly a bag of coins or a
bundle of notes can also be missed.
85. Another instance of where this can happen is where a Post Office
product is sold on the retail side of the business. Most Post
Office products must be sold from the Post Office counter in the
branch premises. However a few Post Office products, such as
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lottery scratchcards, are permitted to be sold from the retail
business. However, it is the subpostmasters responsibility to make
sure that any cash taken from the sale of such products is
transferred from the retail businesss to the Post Office side, and
properly counted in any cash declaration.
86. Cash remittance pouches that have also been made up in preparation
for the Cash in Transit collection drivers may be erroneously
counted as part of the cash declaration. Horizon does not include
this amount within the cash holding figure and, therefore, the
branch would be declaring a gain in this instance.
Mixing retail and Post Office business
87. Generally, a branch must keep physical separation between retail
and Post Office cash. Mixing these two sets of cash can lead to
Post Office cash being lost to the retail business.
87.1 Theft
(a) Theft by branch staff has and can occur. It may
involve staff taking directly from safes or drawers
where the branch has not put sufficient controls in
place. These shortages would be identified when a
physical cash count and declaration is made, but it
is not possible for Post Office to remotely identify
when the theft occurred. Some thefts may also be
accompanied by an effort to disguise the theft eg.
creating false transactions or gains.
Examples:
Cash or stock may be falsely declared to give the
impression that the cash or stock is in the branch
when in fact it has been stolen.
“Phantom” cash remittance pouches could be created
to mask an amount of cash that is missing but the
pouch is reversed before the dispatch, returning
more value stock than is actually received (creating
a negative stock figure) I (c [A20}: Please explain in more detail-not clear.)
Recording more cheques as being dispatched than are
cleared.
[ABA]: Bolan in ove dea )
It is possible to identify the user ID that was used
to undertake these transactions but it is difficult
to prove exactly when the actual theft occurred.
(o)
Theft from customers can also occur and may not
necessarily result in a branch miss-balance. Example
a member of staff targets a vulnerable Post Office
Card account customer and confuses the customer to
the extent that the staff undertake the transaction
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twice but convince the customer it has only happened
once. The staff then takes the amount which is
surplus, but the branch will still balance. This
process relies on customer complaints or tip-offs to
identify the theft. I ‘Commented [A22J: Does this cause a loss to POL If not,
delete and provide an example which causes loss to POL
87.2 Giving money out instead of accepting money
At the end of a customer transaction, payment needs to
be made to or received from the customer. Even if the
transaction is correctly recorded on Horizon, branch
staff may take or hand out the wrong amount of cash.
Example:
A business banking customer may present documentation
to deposit £1000 into their business banking account.
If at the end of the transaction £1000.in cash is given
to the customer instead of taking £1000 in cash from
the customer there will be a shortage to the branch of
£2000, made up of the deposit entry £1000 being
correctly input onto Horizon (Horizon then expects to
receive £1000) andthe settlement out to cash of a
further £1000 which will be deducted from the cash in
branch.
However, this error could be as simple as miscounting
cash before handing it to the customer.
87.3 Accidental loss
Losses may occur accidentally in branches. For
example, money dropped in bins with rubbish, money
dropped or knocked into mail bags, and money left on
counter tops which is snatched by a customer without
branch knowledge.
In the first two of these examples the honesty of the
finder and the ability to identify the money as coming
from the branch is required to return the money to the
branch.
In the third example unless the person is caught in the
act of snatching the cash it is probable that the loss
would only be discovered at the end of day cash
declaration or at the time of completing the Branch
Trading Statement. The branch staff may be unaware of
how the loss had occurred.
Transaction Acknowli ts
88. [[ransaction Acknowledgements (TAs) are an automated way to account
for transactions carried out for the following Camelot
(Lottery) /Paystation™/Post & Go. These transactions are carried out
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on a separate piece of equipment from the Horizon terminal and
therefore the accounting needs to be accounted for on Horizon in
order for the branch to balance. Prior to TAs being launched the
subpostmaster would have to obtain the relevant print outs from the
equipment and then input these figures onto Horizon and reconcile
any cash owed. The launch of TAs removed the need for the
subpostmaster to manually input the figures onto Horizon.
89. The transactions for Camelot, paystation and Post and Go are
processed overnight and the “Transaction Acknowledgement” is sent
to the branch the following morning confirming all transactions
that took place the previous day. The Transaction Acknowledgement
must be accepted by the first person who logs on and the
corresponding net cash relating to all transactions for the
relevant TA should then be paid into the stock unit in which the TA
is accepted. If the Horizon user accidentally pays the cash amount
into the wrong stock unit this will be identified when the end of
day cash declaration is competed as one stock will be over by the
amount of the TA and another stock will be short by the same
amount. Alternatively, if the subpostmaster accepts the TA but
does not pay in the relevant cash then there will be a shortage. ‘Commented [A23]: This section needs to be re-written in more
simple terms, Including explaining TAs in more etal and the effect
Outstanding transfers between stock units Cie Se dD
90. Where a branch has more than 1 stock unit in use there may be times
when cash and/or stock are transferred from one stock to another.
For example if stock unit AA is running short of cash, stock unit
BB may transfer money to allow customer service to continue
smoothly. The user in stock unit BB should choose the transfer out
option in Horizon and choose the correct stock unit (in this case
stock unit AA) and transfer the cash out. A receipt is printed
which is kept in stock unit BB to confirm this. The user in stock
unit AA then needs to accept the cash on Horizon and print their
own receipt to confirm this. At this time a Branch Trading
Statement or (at any other time) a report called “Transfer
Reconciliation” can be printed from Horizon to confirm that there
are no outstanding transfers pending and that all totals are equal
to zero. ‘Commented [A24]: What isa stock unit? Please explain in less
jargon.
Transaction Correction:
91. Transaction Corrections (TCs) are electronic notices generated
remotely from the FSC to correct transactions which have been
carried out incorrectly on Horizon. Depending on the type of error
a TC may also have a financial impact on the branch. Where this is
the case the physical act of adding or removing the cash must
follow the acceptance of the TC. Only individuals with manager or
supervisor level access to Horizon can access and manage these
messages when prompted by the FSC. All TCs must be processed before
the last stock unit in the branch balances otherwise the Branch
Trading period roll over cannot take place. It’s recommended that
TCs are processed as soon as conveniently possible. TCs with a
financial impact can either be made good to cash or cheque, or
settled centrally if the value is over £150 so that FSC can arrange
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to recover a loss by debt recovery. Further detail is provided
[above]. I
DVLA Motor ve
92. Failure to follow the correct process for accounting for MVL discs
(commonly referred to as tax discs) can also lead to miss-balances
in branch. Branches will receive MVL discs from Post Office which
they have to rem into their stock using Horizon.
93. When the discs have passed the time where they can be put onto a
car, the branch is responsible for destroying the discs and
following a process to inform Post Office that they have been
destroyed. When destroying the discs, if the branch does not follow
all of the steps of “spoiling the disc” and remitting it out to
Post Office, Horizon will still record the disc as being in the
branch, even though the disc has been destroyed. When the branch
comes to balance and a full count of the discs is undertaken as
part of the stock balance, the number of discs in branch will not
match the amount recorded by Horizon. Whilst this does not create a
cash shortage, branches are held liable for "missing" discs at a
charge of £41.50 per disc because Post Office is liable to the DVLA
for the "lost" disc [correct?]
94, Failure to follow the reversal procedure for a MVL disc may also
lead to a branch discrepancy. For example, a customer asks to buy
a car tax disc and the transaction is completed on Horizon, but no
payment is actually taken, the branch has to reverse the
transaction and the disc. There are a number of steps that the
branch needs to follow. The branch has to reverse both the disc and
the payment. If they only reverse the disc out of the system then
the stock of discs will balance, but the branch will miss-balance
in terms of the cash.
Cash and stock remittance erro:
94.1 Cash remittances
(a) If there is mistake made between the amount that is
remmed in or out and what is received or sent by or
to the Post office cash centre, then this will lead
to a branch discrepancy. For example, if the branch
has bagged up £25,000 to send to the cash centre but
enters £20,000 into the system then there will, in
the short term, be a shortage of £5,000. If the cash
has left the branch then the mistake cannot be
rectified by the branch. The cash will be counted at
the cash centre and a Transaction Correction will be
sent to the branch to rectify the branch account.
(b) If a branch has an ATM machine, then it will receive
a separate cash remittance for ATM. This is because
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‘Commented [A25]: How does this cause aloss? The TCis the
process of coreecting a loss but not the cause.
=
‘transaction? Ifso, this should be gen
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the notes in the ATM machine have to be prepared to
a certain standard to meet regulations and,
therefore, cash used over the counter cannot be
transferred into the ATM without the prior consent
of the Cash Management Team.
94.2 Stock remittances
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(a)
(b)
Branches receive their stock (postage, MVLs etc)
from Post Office either via Cash in Transit or Royal
Mail Special Delivery. The branch is responsible for
checking that the amount of stock received matches
the advice note delivered with the order and remming
the stock onto the correct lines in Horizon.
Branches are required to return some value stock
items back to Swindon. This is usually connected to
Special Stamps which should be withdrawn from sale.
The branch has to rem out the stamps on Horizon and
return the amount via the same method as receipt.
Swindon will, therefore, receive and process large
amounts of stock and cash and only check 10% of
stock returned. If the branch does not identify the
mistake quickly enough and the pouch has been
destroyed then there may be way of verifying [any
discrepancy.
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(Commented [A27]: What's the error here? )
‘Commented [A28]: Would do you mean by verifying? Ifthe
loss cannot be verified, then can it not be reversed?
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Schedule 1: List of Products
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Schedule 2: Glossary of Post Office terms
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